$1M Airbnb: Your Cost Segregation Breakdown

Million-dollar STR investments generate six-figure tax deductions through cost segregation — enough to meaningfully reshape your tax position for years.

$272,000 Accelerated Depreciation

$100,640 Est. Year-1 Tax Savings

84x Return on Study Cost

Adjust Your Numbers

Property Type

Purchase Price

Depreciable Basis (80%) $800,000

Accelerated Depreciation $272,000

Est. Year-1 Tax Savings $100,640

Study Cost $1,195

Return on Study 84x

Order Your Study →

MACRS Depreciation Breakdown

MACRS Class	Amount	% of Accelerated	Bonus Eligible
5-Year Property	$190,400	70%	Yes — 100%
7-Year Property	$21,760	8%	Yes — 100%
15-Year Property	$59,840	22%	Yes — 100%
27.5yr Property	$528,000	66%	No — standard schedule
Total Depreciable Basis	$800,000	100%	—

Method	Year-1 Deduction	Difference
Standard Straight-Line (27.5yr)	$29,091	—
With Cost Segregation + Bonus	$272,000	+$242,909

Estimated deduction based on typical cost segregation allocations for airbnb / short-term rental properties. Actual study results may vary based on property-specific analysis including age, condition, renovations, and local construction costs.

What This Means for You

Investing $1M in a short-term rental property unlocks the full power of cost segregation. At this price point, the accelerated depreciation approaches $272K — enough to generate over $100K in first-year tax savings. For high-income investors in the 37% bracket, this single deduction can eliminate a substantial portion of their federal tax liability.

Properties at the million-dollar level tend to be luxury STRs with extensive buildouts: custom kitchens, high-end appliances, designer furnishings, smart home automation, premium landscaping, pools, and outdoor entertainment areas. Every one of these elements qualifies for accelerated MACRS classification — most in the 5-year class, with site improvements in the 15-year class.

The study cost at $1M is $1,195 — still remarkably affordable relative to the deduction. Many investors at this level work with CPAs who specifically recommend cost segregation as part of a broader tax strategy that includes bonus depreciation, material participation qualification, and strategic timing of property purchases around tax year-end.

✅

IRS Compliant Methodology aligned with IRS Audit Techniques Guide

📈

CPA-Ready Reports 30-40 page PDF your CPA can file directly

💰

Money-Back Guarantee Full refund if the study doesn't save you money

📄

See a Sample Download sample report

Compare: Airbnb / Short-Term Rental at Different Price Points

Price	Accelerated	Tax Savings	Study Cost	ROI
$300K	$81,600	$30,192	$795	38x
$500K	$136,000	$50,320	$795	63x
$750K	$204,000	$75,480	$795	95x
$1M	$272,000	$100,640	$1,195	84x
$400K	$108,800	$40,256	$795	51x
$600K	$163,200	$60,384	$795	76x
$1.5M	$408,000	$150,960	$1,195	126x

Compare: $1,000,000 Across Property Types

Property Type	Accelerated	Tax Savings	Study Cost	ROI
Airbnb / Short-Term Rental	$272,000	$100,640	$1,195	84x
Multifamily	$144,000	$53,280	$1,195	45x
Rental Property	$144,000	$53,280	$1,195	45x

Frequently Asked Questions

What is a cost segregation study? ▼

A cost segregation study is an engineering-based analysis that reclassifies components of your property into shorter IRS depreciation categories (5, 7, and 15 years) instead of the default 27.5 or 39 years. This accelerates your depreciation deductions, reducing your tax bill in the early years of ownership.

Why do Airbnbs get higher cost segregation deductions? ▼

Short-term rentals are typically furnished with furniture, appliances, electronics, linens, kitchenware, and décor — all of which qualify as 5-year personal property under MACRS. This FF&E (furniture, fixtures, and equipment) often represents 15-20% of the property's depreciable basis, significantly increasing the accelerated depreciation amount compared to unfurnished long-term rentals.

What about depreciation recapture when I sell? ▼

When you sell a property, the IRS recaptures accelerated depreciation at a maximum rate of 25%. However, the time value of money strongly favors taking the deduction now: $50K in tax savings today is worth far more than paying $12,500 in recapture tax years later. Additionally, a 1031 exchange can defer recapture indefinitely.